Trends come and go, but there's something that remains always en vogue - litigation - especially in fashion matters. This year opened with the Adidas Vs Thom Browne trial, but continued in February with an intriguing battle between Hermès International and Los Angeles-based artist and entrepreneur Mason Rothschild (real name Sonny Estival) over the "MetaBirkins" digital collectible NFTs.
Representing faux-fur Birkin bags, some of them inspired by the works of renowned artists including Van Gogh, Goya, Dali and Hokusai, the NFTs were launched and sold on the OpenSea platform. The initial asking price for the MetaBirkins in Ethereum was around $450 for each bag, but their values increased via the resale market and one NFT was sold for $45,000; the artist received a 7.5 percent royalty for resales of MetaBirkins.
According to the luxury brand, the NFTs confused consumers who may have thought this was an official collaboration between the two parties, so the company filed suit in January 2022.
During the trial that took place in January this year, Rothschild explained how he developed and promoted the project, mentioning the fact that the idea to cover bags in fur was "a commentary on fashion's history of animal cruelty, and its current embrace of fur-free initiatives and alternative textiles."
Rothschild and his legal team made connections between the MetaBirkins and Andy Warhol's silkscreen series of Campbell's Soup Cans, highlighting that artistic expression/artistic freedom is protected under the First Amendment and that MetaBirkins were an "artistic expression" of the Birkin bag. The team tried to prove this point with the Rogers Test.
In the end a Manhattan nine-person federal jury ruled in favour of the French company and against Rothschild: the jury found Rothschild liable of trademark infringement, brand dilution and cybersquatting. The jury also decided that the First Amendment does not bar liability and awarded Hermès $133,000 in total damages. As the jury deliberated against him, Rothschild's attorney, Lex Lumina PLLC's Rhett Millsaps, announced they would have appealed.
The case was closely-watched being one of the first lawsuits revolving around trademark issues and NFTs and the extension of IRL trademark rights to the virtual world.
At the beginning of March, Hermès filed a motion for a permanent injunction, urging the court to permanently block Rothschild's promotion and sale of the NFTs. But on Tuesday this week Rothschild's legal team lodged a renewed motion for judgment as a matter of law or a new trial. In addition to that, counsel for Rothschild also filed their opposition to Hermès' motion for a permanent injunction.
The team highlighted that Hermès did not produce any evidence of concrete harm suffered from Rothschild's promotion and sales of his MetaBirkins artworks. During the trial it was indeed stated that Hermés has sold more than $1 billion worth of Birkins in the past decade in the U.S. alone and Robert Chavez, president and chief executive officer of Hermés Americas, explained that he was not aware of any lost revenue due to the MetaBirkins, so the company wasn't damaged by the project.
In the opposition to Hermès' permanent injunction the artist’s legal team stated that the court didn't structure properly the instructions to the jury. Besides, the team claimed that the First Amendment is not "a defense to trademark claims" but a rule of construction that shapes the plaintiff’s prima facie case. According to Rothschild's legal team, Hermès' cybersquatting claim was also unsupported by evidence and was inconsistent with the First Amendment.
Rothschild's lawyers also claimed that when instructing the jury, "the court failed to [properly] implement the 'Rogers Test'," asking the jury "first to determine whether Rothschild was liable for infringement, dilution, or cybersquatting, and then to turn to the Rogers considerations only after determining Rothschild was liable on one or more of those claims." This means that the court treated Rogers as an affirmative defense, but Rothschild's team states that "Rogers does not create an affirmative defense excusing otherwise unlawful conduct; it replaces the ordinary infringement rules with two and only two considerations: artistic relevance and explicit misleadingness,"
Named after the "Rogers Vs Grimaldi" case (1989; also used in the Nike / Lil Nas X / MSCHF litigation, as you may remember), the test takes into consideration somebody's trademark rights and another person's right to create some kind of creative expression from that. More specifically, the case refers to Ginger Rogers who sued Alberto Grimaldi and MGM for production and distribution of the 1986 Federico Fellini film "Ginger and Fred", that featured a cabaret couple, Pippo and Amelia, emulating Fred Astaire and Ginger Rogers. In this case the Second Circuit, on appeal, highlighted that Rogers' right to protect her celebrated name was clashing with the right of others to express themselves freely in their own artistic work, and found Grimaldi not liable as suppressing an artistically relevant film on trademark grounds would "unduly restrict expression". According to the team behind Rothschild, had the Rogers test been correctly applied, the jury would have realized that the artworks are protected by the First Amendment."
Rothschild's legal team also challenged the judge's decision to not allow testimony from contemporary art critic Dr. Blake Gopnik, author of a biography of Andy Warhol. According to Judge Rakoff, Gopnik's expertise in art history wasn't based on reliable data or a clear methodology and Gopnik (who supports the thesis that the MetaBirkins can be filed under the "Business Art", a practice at the intersection of art and commerce, even though Judge Rakoff stated that Gopnik never offered a "systemic definition of what is business art") would be the only person who could draw parallels between Warhol's and Rothschild's art.
Gopnik wrote a Washington Post op-ed in February about the case, stating "I couldn't see any real difference between Rothschild and the many artists, good and bad, who made art about our culture's commerce, often by including trademarked goods: there's Warhol and his Campbell’s Soups, Coca-Colas and Brillo Boxes (…) Earlier artists also profited from including trademarked goods in some of their most famous paintings, and I guess Hermès must wish they hadn't been allowed to (...) I still imagined that no jury would actually prevent a young artist from making pictures of pretty much whatever he wanted, whether it bothered a great bag-maker or not (…) I was wrong about that jury but hope an appeals court will realize that the jury was wrong about Rothschild's art."
Time will tell if Rothschild will get a new trial, but nothing changes for artists for the time being: even if Rothschild won, using trademarks for a creative work, including NFTs, remains a dangerous ground. But it is relevant to follow such cases since, in future, as digital art becomes more widespread especially as the use of Artificial Intelligence applications multiply, law makers may have to try and rewrite certain rules.
As for Hermès, settling on a collaboration would have made things easier for everybody in this case: after all, there are millions of Birkin copies all over the world and all over the Internet and it is simply impossible even for them to sue every single manufacturer producing fake bags. But, despite his recklessness maybe in creating, marketing and selling the NFTs, Rothschild may have been an asset for the company as he may have developed desirable NFTs for them.
What's for sure as the "Hermès Vs MetaBirkins" saga continues is that fashion law is trending: looks like there isn't much point in doing all these shows à la Project Runway (Amazon Prime Video) or Next in Fashion (Netflix) about finding the next talented fashion designer as such programs seem so passé compared to the fashion law sagas trending in the courts.
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